The precious metals market hasn’t done that much since I posted my gold price forecast for August 2025, so today’s issue will be a supplement rather than a major update – there’s simply nothing to update.
One thing that I’d like to update you on is that the GDX ended yesterday’s session lower (just a $0.14 decline - but it’s still a decline), and this happened right after it was just $0.12 below its 2011 high.
In my view, the top is likely either in or about to be in.
In yesterday’s Gold Trading Alert, I already discussed this resistance’s importance as well as the analogous one in the GDXJ, and I discussed the current situation in gold, especially relative to what’s happening in the USD Index. In Tuesday’s Gold Trading Alert, I’m explaining why GDXJ and NEM are likely to decline more than GDX – I’m also elaborating on the 2011 – now link.
Dollar Index Holds the Line
What I’d like to add today is that the USD Index is still holding up well despite this week’s correction.
Its long-term outlook remains excellent (as I described previously), and even on a short-term basis, we see that its support (rising line) is holding up well.
The thick support line is based on the daily closes. The USD Index moved back up after touching it.
The dashed line is based on intraday lows – the USDX is back above it after moving briefly below it, and the tiny breakdown was invalidated. The short-term outlook is bullish.
Having said that, let’s take a look at what’s happening in other related markets, like platinum and copper.
The little silver (that’s what platina means in Spanish) corrected 38.2% of its recent slide and right now it’s making its fourth attempt to stay above this level.
Just as the previous three attempts failed, the same is likely for this one.
Please note that the second high was higher than the first and third (and also the current fourth) one. This means that it could be the case that platinum is forming a head-and-shoulders top here. Breakdown below $1,310 or so, would likely result in a move to new monthly lows, which – in turn – would likely lead to a move below May lows.
Let’s keep in mind that platinum was the previous leader, while miners lagged. When leaders are declining while laggards are catching up, we know that it’s likely a top in the making.
FCX Rally May Be Short-Lived
Meanwhile, copper is consolidating in a classic flag pattern. Those patterns tend to be followed by moves that are similar to the ones that preceded them. In this case, it suggests that copper is likely to decline severely in the following days. Those with short positions in FCX are likely to greatly benefit from such a decline.
Also, since big moves in copper tend to be aligned with big moves in gold and silver, it’s likely that we’ll see bigger declines shortly.
As those of you with Diamond or direct access to Gold & Energy Edge know, David Chen just went long FCX for a quick trade, and I’d like to emphasize that the move lower that I expect to see in FCX is of much greater magnitude. Even if FCX rallies to its upside target (which is still below $48), I think that FCX will still drop all the way down to $24 in the following months.
And if you think this is unrealistic, please note how much FCX declined in 2008 when precious metals declined along with stocks (the Volatility Based System suggests gains, but they may be short-lived). Tariffs are likely to result in stock market declines sooner or later, and they are likely to limit the demand for commodities such as copper, so the above technical indication has also fundamental backing.
Combining all the above with the very strong similarity to the 2011 top and the extremely strong resistance that the mining stocks just reached, points to only one likely scenario – bigger declines in the following weeks.
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Thank you.
